Scott Buchholz (Wright, Liberal Party) Share this | Hansard source

It gives me great pleasure to stand here in the House and give an overview of, and speak to, the Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014. The bill has its complexities. It has seven schedules to it. Schedule 1 provides for fairer taxation of excess, non-concessional superannuation contributions. Schedule 2 transfers to the Inspector-General of Taxation the tax investigation and complaint-handling function of the Commonwealth Ombudsman. Schedule 3 talks about CGT exemptions for compensation and insurance. Schedule 4 provides certainty for superannuation fund mergers, which are happening in the marketplace as we speak. Schedule 5 speaks to the disclosure of tax information relating to proceeds-of-crime orders. Schedule 6 speaks about the exploration and development initiatives that this government is putting in place. Schedule 7 deals with miscellaneous amendments.

The public who are listening to these proceedings do not have the same regard for debates on tax and superannuation legislation as they do for question time. There is no theatre around it. But this is where we do the heavy lifting in this House. The outcomes of these debates influence the direction of our markets. These debates—and, hopefully, the victories we will have—give certainty to sectors of the market who are looking to the superannuation space for certainty for their funds into the future.

Schedule 1 deals with the fairer taxation of excess, non-concessional superannuation contributions. This government has introduced fairness to the taxation of excess, non-concessional superannuation contributions—after-tax contributions made by an individual. We believe the current treatment of breaches of the non-concessional contributions cap can be punitive and need to be made fairer. The overall tax rate that has applied to some breaches has been as high as 93 per cent, which is alarming. We are honouring our election commitment to make sure inadvertent breaches of the non-concessional contributions cap do not occur and thus do not receive a disproportionate penalty. We are delivering on our commitments at the election. There is an expectation from the Australian public that we tidy up some of these areas, and these bills are the vehicle for those amendments to be put.

Most breaches of the non-concessional superannuation contributions caps are inadvertent and can be due to events that are out of the taxpayer's control. The changes the government is introducing will allow people the option to withdraw these excess contributions and any associated earnings, with the earnings taxed at the individual's marginal tax rate. The measure applies to the non-concessional contributions made from 1 July 2013. The measures provide Australians with the opportunity to correct their mistakes and avoid the most punitive aspects of the excess contributions tax regime. It will ensure that the treatment of excess concessional and non-concessional contributions is broadly consistent. This bill tightens up the wording so that there is greater clarity for mums and dads and those brokers or agents who are giving advice, which will hopefully take away the ambiguity that exists at the moment. The government consulted widely on these measures, and our approach balances compliance costs against measures to discourage aggressive tax planning strategies. Everyone looks for loopholes. So if we can make legislation more understandable, more transparent, we will not then have a growth industry driving outcomes we do not want. This measure is expected to affect around 1,000 individuals to 2013-14, resulting in average tax saving of around $15,000.

Schedule 2 of the bill transfers the tax investigation function of the Commonwealth Ombudsman to the Inspector-General of Taxation. That is not in itself controversial, but I will take you through some of the reasoning for it. The schedule transfers from the Commonwealth Ombudsman to the Inspector-General of Taxation the complaint-handling function and the general tax revenue function relating to individuals. Inspectors will now have a single, specialised scrutiny agent for handling both individual tax complaints and systemic tax reviews. All investigations and complaint-handling powers and functions relating to taxation administration by tax officials will now be handled by the Inspector-General of Taxation. Centralising these functions will purely provide efficiencies in that department.

The role of external scrutiny is to provide independent assurance that ATO services are well managed and fit for purpose and that public money is being used properly. The current external scrutiny systems for the Australian Taxation Office include the Commonwealth Ombudsman, the Inspector-General of Taxation, the Auditor-General, the Board of Taxation, the Administrative Appeals Tribunal, the courts and the parliament. So in no way is this a dilution of anyone's right to make a complaint; there are many vehicles for that. This is just about trying to streamline the complaints department so that customers of the Australian Taxation Office are able to get quicker and accurate resolution of their issues. The transfer of tax complaints to the Inspector-General of Taxation will also enable earlier flagging of emerging issues that require more general review, and this ensures better customer outcomes for both individual complaints and the government.

We note that Labor at one stage wanted to close down the Office of the Inspector-General of Taxation. That was a commitment during their 2007 election campaign. To their credit, they dropped it in the following year. At that time the then Assistant Treasurer said, 'The Inspector-General of Taxation plays an important role in ensuring high standards of tax administration for Australian taxpayers'—and we believe that statement to be sound. Subsequently, in 2013, he acknowledged that the Inspector-General of Taxation 'has an important role to play in the functioning of our tax system by providing independent oversight of the Australian Taxation Office and helps to underpin community confidence in the taxpayer system'. So from the commentary in this place and other places, there is wide-held support for that office. We would expect Labor support. The new arrangements are scheduled to commence on—

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